HBOS in trouble

By Edward Harrison On Jun 11, 2008

In April, I wondered aloud where HBOS was in this crisis in a post called “Where’s HBOS?”. Now, we know they are not immune to the problems infecting global finance.

The Guardian has reported on the difficulty HBOS is having raising money in the capital markets as its share price has fallen below the price of its offering.

“HBOS, the country’s biggest lender, was last night desperately defending its fundraising plans after its shares slumped to record lows, putting its £4bn cash call under severe pressure.

Shares dived through the 275p level at which the Halifax and Bank of Scotland group is trying to convince its shareholders to support a rights issue it needs to bolster its capital base.

The shares ended the day at 258p, down almost 12%. Other bank shares also touched new lows. Royal Bank of Scotland, which issued a subdued trading statement yesterday, ended at 212.2p, down 9% and barely above the 200p at which its rights issue, which ended last week, was priced. Alliance & Leicester ended 8% lower and Barclays was 4% down.
–The Guardian, 12 Jun 2008“

All hell is breaking lose in global finance. The second leg down in this credit writedown bonanza has now officially begun.

See the Credit Crisis Timeline for a full list of writedowns by institution.

See also: Other posts under the label ‘UK.’